Ok so $12.8 million is a lot of money. I certainly don’t have anywhere near that kind of money; but for an engine program it really is a pretty fair price.
I can’t say I was surprised by the response from the community as the forums came alive and the blogosphere began buzzing. It is not often we get inside information, and actual solid numbers from these teams. Often times we only get to see these things when they are part of a lawsuit (I like these lawsuits for that very reason). Remember the lawsuit against Ginn last year? We got to see what the drivers and crew chiefs were making. Well this is the same sort of deal with, oddly enough, the same team.
If you are unfamiliar with the lawsuit, HMS Holdings, which operates Hendrick Motorsports’ engine shop, filed suit against Dale Earnhardt Inc. last month for $1.5 million plus some other fees. The suit alleges breach of contract over an engine deal that was inherited from the now defunct Ginn Racing. DEI of course gets all of their engines from Earnhardt Childress Racing Technologies. The lawsuit now sits in the North Carolina Courts.
So the contract provided, for that $12.8 million (and eventually $13.7 million in 2008), engines for three Cup teams for 36 races and one Nationwide team for 35 races. In addition they agreed to provide Ginn with engines for up to nine tests or special events.
In total the contract provided engines for 152 events. Ultimately if you break it down, it costs $84,210.53 (if you round) per engine in 2007, and $90,131.58 in 2008. While this may seem like a lot to rent an engine, it is a pretty standard figure. Now I don’t know the exact figures at every organization, but from what I know, that number is really not too far off what everybody else is charging.
Between PME, ECR, Evernham, Roush-Yates and ECR, Hendrick really has one of the best programs out there. If you’ll remember Ginn was a very competitive team throughout the early part of 2007; Mark Martin was considered a contender for the championship before he exited for his partial retirement. They were on their way to having a very good season.
All in all I would say the deal was not a bad one; and obviously Bobby Ginn and Jay Frye would agree. I know it seems like a lot of money, but engines are inherently expensive; and if you want engines that can win races, they are going to be very expensive.
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on Dec 22nd, 2008 at 8:46 am
Now I don’t profess to know all that much on Bobby Ginn, other than he is a BIG money real state developer that saw an interest in NASCAR. Sure seems to me like another NON-die hard true racer that wanted to be “involved” in the glitz and glamour of big time stock car racing. Only to find out it’s not what he signed up for. Which leads to me to my concern as the likes of the Petty’s, Woods Brothers, etc struggle to keep alive in today’s Cup. I know it takes a bunch of dough to field cars, but a least Hendrick, Childress and Roush, Petty, Woods Brothers, etc. raced “just to be racing”, some figured a way to make some money along the way w/ only a relatively little to start. NASCAR has succeeded because of its rich history. Lose a piece of history, bit by bit, and soon you have a simply a parade of billboards and a traveling circus.
on Dec 22nd, 2008 at 9:25 am
I agree with Neon’s comments and wonder what some of these investors see that makes them want to invest in a NASCAR team.
Remember the only way to make money racing is to start with a lot more than you spend
Do you remember a few years back when Scott Wimmer was let go at Bill Davis Racing and in 2006 (I think) hesued and it spekled out just how much, he had been paid and what he was do, because they failed to honor his contract, never did hear the results of that action.
on Dec 22nd, 2008 at 8:26 pm
There have been a few analogies over the years regarding racing, Horsepower costs money, (How fast do you want to go)or It’s a big boy game, (can you afford to play.) It’s strange how these analogies seem to be very true in NASCAR and other forms of racing. This is where the makings of real racers like HMS Childress and other larger teams come to lite, then again it brings the want a bees like Boston Ventures, Bobby Ginn to lite. It shows who the real players are. Situations like PE and WB need to do what they need to do to survive, they are the one’s who got burned by people like the BV’s and Bobby Ginns of the NASCAR world. It’s a dog eat dog world in NASCAR, Hopefully the all of the real racers will survive. Hopefully the investors who don’t care about the sport will go awy as fast as they came.